Non-Metered Utilities for Potential Apartment Purchase

[Bill Manassero]

I'm currently looking at a 40-unit apartment in Indiana but one of the bigger pitfalls is that landlord pays all utilities.  The broker gave me a utility estimate of $5,000 per month (E-$2,000/mo, W=$2,000/mo, G=$1,800/mo) but I don't know how realistic that is.  Also, to separately meter each unit sounds very expensive.  Any thoughts/comments/recommendations?

[Michael Seeker]

I would ask for actuals from the past 12 months (in the hopes of getting them for 1 month).

The estimates provided equate to $50 electric, $50 water, $45 gas, so $145/mo/unit.  This could be reasonable depending on the type of heat/AC and other fixtures.  I wouldn't rely on an estimate from a broker though, you should either figure out your own estimate by calling the local utilities or get actuals from the current owner.  Estimates are rarely on the conservative side, especially when coming from somebody trying to sell (broker or seller).

Separately metering would be a pretty large cost.  Might help to have more info on the property, purchase price, rents, etc.